The S&P BSE Sensex vaulted more than 1,400 points to end at a record closing high on May 20 after most of the exit polls showed that the BJP-led NDA will get between 267-365 seats in the Lok Sabha and pave way for the second term for Prime Minister Narendra Modi.
Sensex reclaimed its crucial resistance level of 39,000 while Nifty50 added more than 400 points to rally above 11,800. Both Sensex and Nifty saw their biggest gains in the last 10 years.
Investors’ wealth rose by more than Rs 5 lakh crore in just one session. The average market capitalisation of the BSE listed companies rose to Rs 151.93 lakh crore on May 20 compared to Rs 146.58 lakh crore recorded on May 17, Friday.
The final tally – the S&P BSE Sensex rallied 1,421 points to close at 39,352 while Nifty ended 421 points up at 11,828. The move was largely led by short coverings as well as fresh buying.Nifty Bank hit a record high of 30,827 before closing the day at 30,759, up 1,309 points. Strong gains were seen in stocks like Bank of Baroda (up 9.4 percent), IndusInd Bank (up 8.8 percent), SBI (up 7.9 percent), and Yes Bank (7 percent).
More than 50 stock hit a 52-week high on the BSE that include Bajaj Finserv, Shree Cements, Bajaj Finance, HDFC Bank, HDFC, Kotak Bank, Titan Company, Axis Bank, ICICI Bank, SBI and DCB Bank, among others.
Apart from banks, the S&P BSE Capital Goods index rose over 5 percent, followed by BSE Realty index that gained 5.4 percent and the S&P BSE Public Sector that rose 5.3 percent.
The street was already factoring in a second term of the Modi government but the margin of victory was something that was in question. The exit polls suggest that the Modi government should be able to form the government on its own, which cheered investor sentiment.
“Exit polls conducted by various media agencies have predicted a clear majority to the NDA. This is slightly better than the projections of opinion polls conducted prior to the elections,” Motilal Oswal said in a report.
“The exit polls accord an average of 304 seats to the NDA and 118 seats to the UPA, with the rest of the seats going to other parties outside of these two pre-poll alliances,” it said.
If the trend sustains, and on the results day if BJP manages to secure more than half of the seats, the Nifty could well chart a fresh course for itself to hit 12,000.
“The rise in benchmark indices is justified considering the numbers that have come in the exit polls,” Rusmik Oza, Head of Fundamental Research, Kotak Securities told Moneycontrol.According to exit polls, BJP will win an average of 260 seats, while the Congress is expected to win 67 seats. The ruling party will gain a foothold in West Bengal, North-East and Odisha while holding on to its 2014 tally by and large in Rajasthan, Gujarat, Bihar, Delhi and Haryana.
However, exit polls should also be taken with a pinch of salt because they have gone wrong in the past, with 2004 being the most recent example when exit polls were predicting victory for NDA but the eventual result was at variance with exit polls.
Subsequently, in 2009 and 2014, exit polls got the direction of the mandate right but under-estimated the margin of the winner.
"As per the poll of polls, NDA led by BJP is likely to easily cross the half-way mark. A big sigh of relief for investors as it favours continuity and familiarity in terms of roll-out of policies,” Ajay Bodke CEO PMS Prabhudas Lilladher told Moneycontrol.
“If NDA were to fall short of the half-way mark, it would have led to a scramble for allies like TRS, Jagan Congress and BJD. Any indication of BJP alone getting a majority can lead to a sharp upsurge in equity markets and strengthening of rupee,” he said.
No comments:
Post a Comment